This is not a local phenomenon, but happens around the world: while the European Central Bank cut the key rate to a minimum, the margins applied by lenders continue to be very high. “It is useless for you, a central bank, to make money less expensive, if you do not have a transmission mechanism. You give liquidity to banks, but the risk of reimbursing that money remains in the bank. If we follow an evolution between EURIBOR or ROBOR and the average active interest rates, we can see this huge spread which means a lack of confidence in the banking system and in the economy,” Deloitte’s Chairman added.
According to the official, the margins applied by lenders will continue to increase as long as new losses are registered by the system. The former banker said that the way in which liquidity is injected onto the open market must be rethought. The profitability of banks will continue to slide, because nonperforming loans turn into provisions, or losses which cut profitability. “In this period, banks are more cautious. They report certain results without revealing their net or operating profit. They try to cover the reality from a PR [public relations] perspective. But if you read a balance sheet carefully, and all of them are audited, with balance sheets in IFRS [International Financial Reporting Standards], you can see what is actually going on. The fact is that they are and will continue to be affected,” Mucibabici said.
